Answers to Your Questions
Property Taxes
- Why is property taxed and how is that tax used?
- Why do my property taxes change?
- How can a property be assessed for more than its purchase price?
- Will my taxes go up every year?
- If I did not receive a tax bill, do I still owe taxes?
- What is annual equalization?
- What can I do if I do not agree with the assessed value of my property?
- Do I have to pay delinquent taxes if I did not own the property in delinquent years?
Business Personal Property Taxes
- Am I required to submit an itemized list of my business personal property every year?
- Most of my business equipment has been fully depreciated on my income tax return; do I still list these items on my business personal property return?
- I already paid taxes on my business personal property; why do I have to pay more taxes?
- Can my business be audited by the Revenue Commissioner?
Property Taxes
Why is property taxed and how is that tax used?
Property taxes provide financial support for county and city services. You benefit from these taxes because they are used by the school system, fire department, social services, road and bridge department, and many more essential service departments.
Property taxes, based on millage rates, are collected for the state and county general funds, state solider fund, state school fund, county road and bridge fund, and county wide school funds. Individual municipalities receive property tax revenue for the city general funds and city school systems.
Why do my property taxes change?
Your property taxes are based in part on the assessed value of your property. Changes may occur to your assessed value due to economic factors that affect the fair market value, such as the inflation rate, interest rates, and current housing market. Improvements such as extensive renovations to your home or the installation of a swimming pool can also affect your property's assessed value, as can any removal of any improvements.
Another reason your property tax may change is due to an increase or decrease in the millage rates. These rates are determined by the needs of the county and/or city general funds or others who receive funding from property taxes.
How can a property be assessed for more than its purchase price?
Your property's assessed value is determined by the fair market value at the time of the assessment and not from the amount paid for the real estate. Because the fair market value is based on factors that fluctuate and change, your assessed value may be more than what you paid for your property.
Will my taxes go up every year?
There are two reasons for your property taxes to increase: (1) a tax rate (millage) increase, or (2) an increase in the appraised value of the property. The first reason, a tax rate increase, would have to come from a vote of the citizens or by the taxing authority (County Commission) to increase (or decrease) the millage rate. The second situation, involving an increase in the appraised value, would come from a court-ordered re-appraisal or from an "economically-based" increase in the market value of properties in the county, resulting in an increase in the appraised value.
If I did not receive a tax bill, do I still owe taxes?
You are responsible for paying taxes on your property regardless of whether you receive a bill or if the bill is in the previous owner's name. All property taxes are due on December 31 and will be considered delinquent if not paid at that time. If you have not received a bill, you can find your property information by using our online property search, or call the Revenue Commissioner's Office at 256-351-4690 to request a copy of the bill.
What is Annual Equalization?
All Alabama counties are now under an 'annual reappraisal' program which requires the assessing official to review 25% of the County each year, and to assess any/all additional buildings identified during this process for the upcoming tax year. A review of 100% of the property in a county will be completed over a four year equalization cycle. The benefit to annual equalization is to improve equalization among similar and dissimilar properties. The annual equalization process also provides a stable as well as an enhanced revenue stream from property taxes for schools, municipal, county, and state government. An equally important result is the small market value increase annually instead of the large market value increase of the four-year cycle. The Director of the Property Tax Division has the duties and responsibilities of managing the activities of the Division. The Code of Alabama 1975, Section 40-7-74 and 40-2-11, directs that the property reappraisal program shall be administered by the Commissioner of Revenue and supervised by the Director of the Property Tax Division.
What can I do if I do not agree with the assessed value of my property?
If you have a dispute with the assessed value of your property, you can submit a written protest to the Morgan County Board of Equalization. More information about disputing an assessed value can be found on the Appeals Process page of this site.
Even if you are in the appeals process, you must either pay your property taxes to the Revenue Commissioner's Office by December 31, or have a bond filed in Circuit Court for double the amount of taxes due. This will preserve your right to carry the appeal process to the Circuit Court.
Do I have to pay delinquent taxes if I did not own the property in delinquent years?
If you purchase tax delinquent property, you will become liable for the taxes owed.
Business Personal Property Taxes
Am I required to submit an itemized list of my business personal property every year?
A list of all business personal property must be submitted to the Revenue Commissioner's Office between October 1 and December 31 of every year. Even if your equipment is the same as last year you will still need to submit a new list this year.
Most of my business equipment has been fully depreciated on my income tax return; do I still list these items on my business personal property return?
Yes. All assets owned as of the October 1 lien date must be reported with acquisition dates and acquisition costs. The depreciation schedule used in preparing income tax returns may be used. However, the depreciation schedule must be adjusted for additions and deletions so that it will contain property owned by the business on the October 1 lien date. Also, assets which are expensed rather than capitalized for income tax purposes are not included on the depreciation schedule must be added to the taxpayer's listing so that all personal property is reported.
I already paid taxes on my business personal property; why do I have to pay more taxes?
When you purchased your business personal property, you paid a sales tax. The ad valorem tax is an "ownership" tax. This is based on the property's value and is not based on your ability to pay or the sale price of the property.
Can my business be audited by the Revenue Commissioner?
Yes. The Morgan County Revenue Commissioner has the authority to perform an audit on your business and regularly audit area businesses that have personal property.